U.S. initial jobless claims fall to 316,000

WASHINGTON (MarketWatch) -- The number of initial filings for state unemployment benefits dropped by 9,000 last week to a seasonally adjusted 316,000, the Labor Department reported Thursday.

First-time claims for the week ended Jan. 29 thus came in at the second-lowest level seen during this expansion.

The four-week moving average of new claims, which smoothes out one-time distortions caused by weather or holidays, dropped by 10,250 to 331,500, the lowest in four weeks and just slightly above the cyclical low. Read the full release.

The insured unemployment rate fell by 0.1 percentage point to 2.1 percent.

Meanwhile, the number of workers collecting jobless benefits dropped by 116,000 to 2.70 million in the week ended Jan. 22. The four-week average of continuing claims fell by 40,000 to a four-year low of 2.71 million.

In a separate report, the Labor Department said productivity in the U.S. nonfarm sector slowed to a 0.8 percent annual rate in the fourth quarter, the smallest gain in nearly four years. See full story.

Bonds sold off on the claims and productivity news, which together indicate inflationary pressures could be building. See full story.

Jobless claims data in December and January are especially difficult to analyze, with volatile holiday-related hiring and firing patterns disrupting the seasonal adjustment process.

The data for late January indicate slow but steady improvement in the labor market.

On Friday, the Labor Department will report on January nonfarm payroll growth. Economists surveyed by MarketWatch expect payrolls to expand by about 189,000, close to the average gain over the past year.

Economists have said initial claims in the neighborhood of 330,000 to 350,000 are consistent with monthly job gains of about 150,000 to 250,000. The economy needs to add about 150,000 jobs a month to absorb new entrants into the labor force.

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